Or, You Know, Danny, We Could Just Tax the Rich

I’d been meaning to comment on Danny Westneat’s recent column suggesting real estate development impact fees as an alternative to the current round of proposed tax increases, and I want to start by thanking Danny for at least attempting to think creatively on the issue. Really. I’m a big fan of using one’s media presence in the service of public brainstorming.

That said, while I’ve got nothing against them in theory, I don’t think impact fees can or should be a big part of the solution here in Seattle.

For example, take Danny’s inspiration: being crowded onto a sweaty No. 8 bus. “By state law impact fees can’t be used directly for transit,” Danny writes. So then, um, what’s the point? Seattle’s transportation benefit district—the same authority Mayor Ed Murray has proposed using to raise vehicle license fees and sales tax in order to buy back Metro bus service cuts—also has the authority to levy impact fees on commercial (nonresidential) development. But that’s not going to add any service hours to Danny’s No. 8 bus.

I’m not saying we shouldn’t use this authority to help fund roads and stuff, just that it does nothing to solve our immediate crisis.

Second, the notion of charging residential impact fees (Danny says that Bellevue charges $2,600 per house and $1,300 per apartment unit) would run headlong into Seattle’s efforts to address our city’s growing affordable housing crisis, both by making new housing more expensive, and potentially more scarce. Furthermore, anything that holds back new construction ends up adversely impacting property tax revenue, as new construction is exempt from I-747’s absurd 1 percent cap on regular levy revenue growth, and thus the engine of revenue growth in general.

Third, the logic of impact fees just doesn’t hold in a dense urban center like Seattle the way it does in a sprawling suburb, where new developments on virgin residential land often require the construction of new roads, new sewers, new fire stations, new schools, and so forth. Most residential development here in Seattle consists of in-filling in areas where all of these basic services already exist, so it just doesn’t carry with it the same sort of additional public infrastructure costs as a new suburban subdivision.

But finally—and this is my biggest complaint with Danny’s solution—impact fees do nothing to address the heart of the problem: our refusal to tax the people who can best afford to pay higher taxes. You know, the wealthy!

Implicit in Danny’s column is the acknowledgment that Seattle’s public services and infrastructure are underfunded. He’s not arguing with the need to expand bus service, maintain our parks, or fund universal preschool. He just seems to think that the latest round of proposed taxes are too much for the average taxpayer to bear. That’s debatable, but if you presume that it’s true, simply shoving the burden onto the backs of newcomers isn’t much of a solution. Instead, we should be looking for ways to ask our under-taxed wealthy to pick up more of the cost of maintaining the city in which they prosper. Not just out of fairness, but out the very pragmatic logic that they are the people with the most extra money to spare.

I look forward to Danny joining me in attempting to brainstorm a solution to that vexing problem.

I always get a pick-me-up by coming over and perusing HA. Over on this blog, people write as if the higher earners didn’t already just get a significantly higher tax bill stuck to them. It’s also as if these higher earners aren’t facing the increased costs of a substantial minimum wage increase in the companies they own, which Robert Reich says they’ll eat instead of passing through to their customers.

If I believe what’s written in the HA thread topics, I begin to think that I wasn’t stuck with all those higher taxes and costs after all. ’cause there’s no mention of how much those tax increases are already hitting the higher earners in what’s written in the thread topics here. They’re still breathing, let’s hit ’em again, it seems.

Solutions are always easier when their costs are borne by someone else, aren’t they? Perhaps Westneat didn’t try the tired soak-the-rich approach because a larger percent of his readership would push back than seems to happen around here.

You can’t really help the poor without taxing the rich, and part of that needs to be in the form of increased impact fees to compensate for the fact that increased numbers of people living in newly built housing in Seattle DO increase use of parks, transportation infastructure, schools, libraries, law enforcement and fire protection services, etc.

@1 The ancient Athenians had a great system for complaints like yours. If a citizen felt that they were being targeted for a public burden and there was someone else better able to pay, they were allowed to propose a trade with another person (call him Person B): they would take on the Person B’s role in society (including assets and debts) and Person B would take theirs, and in this way Person A would not be liable for the public burden. Either Person B would decline the offer to trade (out of recognition that they were in fact richer than Person A) and therefore be liable for the burden, or Person B would agree (believing that Person A was richer) and again Person B would be liable to pay out of his new estate. Either way, Person A didn’t have to pay.

It’s fun to think about implementing that kind of system here. Then anytime Travis or someone else tired of the tax burden, they could simply give up their assets, debts, and job to someone else. They might live hand over fist trying to make ends meet, but at least they wouldn’t have to pay taxes.

It’s important to understand that new taxes are only difficult for heavily taxed lower income households to bear; they are easy for lightly taxed upper income households to bear. Goldy is absolutely right that the place to look for city revenues is the wealthy, who proportionally pay only one-sixth to one-fifth of the state/local taxes the poor pay, relative to their incomes.

re 5 — “And here we are in the modern world, watching Greece insisting on hand-outs but not wanting to change anything about what they do in order to get them. Not really, once the money’s in their account.”

Well, Paul Harvey’s dead, so I guess his tag-line is up for grabs (unless his undeserving relatives with their outstretched hands are still claiming copyright status): and NOW — here’s the rest of the story — http://www.globalresearch.ca/t.....ft/5365013

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